In the fall of 2001, Lou Dobbs was the face of space, business, and space business.

Revisiting Space: The Next Business Frontier

by Jeff FoustMonday, September 9, 2013

“Yet in the next decade, a new form of commerce and a new level of technology will compete with the Internet for the attention span, and dollars, of this very same business community,” wrote the famous business pundit, after describing the tremendous success of Internet-based companies. “Space. Yes, space.”

Those words sound like something that could have been said recently, perhaps by someone enthusiastic about the prospects of companies like SpaceX, Virgin Galactic, Blue Origin, and other “NewSpace” startups. In fact, those comments are a dozen years old, and from someone who has since dropped off the radar of the space community: Lou Dobbs.

“Dobbs projects his own vision of the next big opportunity for business and investors—Space,” a press release for the book stated.

Dobbs made those comments in the introduction of Space: The Next Business Frontier, a book written by Dobbs (with HP Newquist) and published in the fall of 2001. At the time, Dobbs appeared to the public to be uniquely qualified to discuss this new business frontier. As the long-time host of CNN’s Moneyline program, he was one of the best-known figures in business media. Moreover, he was the founder of SPACE.com, a leading website of space news. If Dobbs said space was the next business frontier, the average reader would likely conclude he was on to something.

Was he? I stumbled across my copy of the book recently, laying on top of a bookshelf, dust collecting on the visage of Dobbs that dominates the book’s cover. A copy of the press release from the publisher, Pocket Books, was still tucked inside. “Dobbs projects his own vision of the next big opportunity for business and investors—Space,” the release reads (capitalization in original.) “Dobbs believes that America’s financial destiny is tied to the budding industries that it has established in Space, foreseeing American dominance of space research and space-related business as critical to our continued leadership role in world markets.”

Indeed, in the book Dobbs projects a rosy future for space businesses, citing opportunities in a wide array of markets, from existing applications like communications and navigation to microgravity research and manufacturing, space-based solar power, and tourism, which he calls the “bastard child” of the space business. “Long scoffed at by serious space explorers, space tourism could actually become one of the driving financial forces of s-commerce.”

Uh, “s-commerce”? That’s the term Dobbs coined for space commerce and used—fortunately sparingly—in the book. The genesis of the term is understandable: “e-commerce” was on everyone’s lips with the rise of the Internet and electronic commerce, and around 2001 some people were also using the term “m-commerce” to refer to business done via mobile phones. S-commerce, though, never caught on, maybe because it could be too easily elided, with negative connotations, to “scammerce”.

Amid the optimism in the book for space hotels and manufacturing, to be served by fleets of reusable launch vehicles (RLVs) under development, there is an enemy to s-commerce in Dobbs’s view: NASA. “NASA has frequently behaved as if its current mission is self-preservation and doing just enough to justify its existence,” he complains. “To a large degree, it reached this unenviable position by tightening its stranglehold on the space industry.” That criticism is understandable for the time: many commercial space advocates and organizations, like the Space Frontier Foundation, complained that NASA was an obstacle to space commercialization, and just a few months before the book’s publication, then-NASA administrator Dan Goldin expressed sharp opposition to the flight of space tourist Dennis Tito to the ISS, something Dobbs mentions in the book.

“As a pure-play space business, Kistler Aerospace is at the vanguard of how the space business is sure to evolve,” he writes in the book.

Sometimes, though, that criticism misfires. “Private companies were also kept from the party by a bizarre NASA codicil that allowed these companies to send launch vehicles into orbit, but not bring them back to Earth,” he writes. That was a reference to the fact that, for a number of years, the government had the ability to license commercial launches, but could not similarly license commercial reentries, an obstacle to the development of RLVs. That, however, had nothing to do with NASA, as authority for licensing launches lies with the Department of the Transportation, through the FAA; a 1998 law extended that authority to govern reentries.

Dobbs suggested the solution is not a full privatization of NASA but instead a restructuring of the agency, getting rid of programs that are “nonessential or not commercially viable,” and transferring non-essential elements to other agencies. “Why not turn over education initiatives to the Education Department?” he asks (something the Obama Administration has, in essence, proposed in its restructuring of government education programs in its 2014 budget request, an initiative that has not been welcomed by Congress.) He also proposed creating a “board of directors” for NASA, something similar to proposals in more recent House legislation, including its version of a NASA authorization bill this year.

Dobbs, in the book, doesn’t foresee NASA as being much of a partner for commercial space ventures—he even suggests at one point that it instead become a regulator of the industry. In the book, there’s no mention of the role that NASA has, in fact, taken up in the last several years: as a partner, customer, and financier of commercial ventures, first through the Commercial Orbital Transportation Services (COTS) program for commercial cargo systems, and more recently with the Commercial Crew Development program. NASA also long ago dropped its opposition to tourists flying to the ISS on Soyuz vehicles. The once antagonistic relationship between NASA and entrepreneurial space has largely faded, and NASA officials are welcomed at Space Frontier Foundation conferences.

Other sections of the book, where Dobbs discusses the potential of emerging space markets like microgravity research and tourism, are timeless in a sense: the potential of those markets described in 2001 remains just that in 2013, not yet having been realized. Dobbs was betting on the development of RLVs to lower the cost of space access and thus open those new markets. (He uses that to make another jab at NASA, criticizing it for terminating funding earlier in 2001 for the X-33, making no mention of the significant technical problems that program encountered.) He argues that existing launch vehicle developers have little motivation to develop RLVs on their own, since they benefit from the current system, and that innovation in launch vehicles will have to come from startups.

However, he picks the wrong startup. “As a pure-play space business, Kistler Aerospace is at the vanguard of how the space business is sure to evolve,” he writes, discussing that company’s efforts to develop a two-stage RLV known as the K-1. The K-1, though, would never fly: by 2003 the company filed for Chapter 11 bankruptcy protection and struggled to reorganize. It was acquired in 2006 and became Rocketplane Kistler, getting new life as one of two funded COTS companies. However, it failed to meet its fundraising milestones and subsequently lost its COTS award, and by 2010 had filed for Chapter 7 bankruptcy liquidation.

Dobbs spends far less time discussing what would become a major part of the entrepreneurial space field since the book’s publication: suborbital vehicles, including suborbital RLVs. There are brief mentions of suborbital space tourism in the book, and about a page devoted to the X PRIZE, but little else. There’s no mention of the company that would win the prize three years later, Scaled Composites, even though it was a registered team at the time and widely considered a leading contender—although no one knew yet exactly what they were planning. He does, though, devote a paragraph to Virgin Galactic, a venture at the time reportedly interested in orbital spaceflight. Virgin founder Richard Branson’s “participation in, and the promotion of, space tourism would significantly ratchet up the current level of activity.” That turned out to be true, even if the company’s focus is, for now, on suborbital space tourism.

“The coming endeavors will be part of New Space, a place that holds the promise once offered to Europeans by the New World,” he writes in the book’s introduction, foreshadowing the use of “NewSpace” to refer to space ventures.

While many of Dobbs’s assessments missed the mark, looking back 12 years uncovers a few prescient comments as well. Near the end of the book, he hails the development of “picosatellites” weighing just a couple kilograms, citing in particular work being done by the Aerospace Corporation. “Putting a constellation of these picosatellites into orbit would still cost less than the cost of launching individual satellites weighing a ton or more,” he writes, something that developers of smallsats today are pursuing. He also warned of the deleterious effects of US satellite export policy on the industry, just a couple of years after satellites and related components were moved by Congress to the US Munitions List and placed under the control of ITAR. “The government created this yoke, and it will be up to the government to remove it,” he writes, something Congress finally did less than a year ago, a process that is still unfolding today.

And, while Dobbs’s “s-commerce” moniker might has been a clunker, another term he used had more staying power. “The coming endeavors will be part of New Space, a place that holds the promise once offered to Europeans by the New World,” he writes in the book’s introduction. “It represents a departure from Old Space, where getting there was all that mattered, and costs be damned.” The entrepreneurial space industry is today widely called “NewSpace” (one word versus Dobbs’s two), a term that came into vogue well after the book’s publication. The rise of the term “NewSpace” may have had little to do with the book, but the comparisons Dobbs makes between “old” and “new” space companies mirrors those made by NewSpace proponents to this day.

By the time people were frequently talking about NewSpace, Dobbs had left the space business behind. Dobbs had already returned to CNN when the book was published; he left acrimoniously in 1999 and soon after founded SPACE.com. (I briefly crossed paths with Dobbs in 2000, after SPACE.com acquired Starport.com, a startup I had been involved with. I met with Dobbs for a few minutes during a visit to SPACE.com’s New York offices in the summer of 2000, and had amicably parted ways with SPACE.com by the end of that year.) Dobbs became known for his controversial opinions on immigration, rather than space. The biography on his official website makes no mention of his time at SPACE.com, and Space: The Next Business Frontier isn’t included in the list of books he’s authored on his site.

There is one bit of sage advice at the end of the book that holds as true today as it did in 2001. “Space, while more exciting and potentially mysterious than many market segments, still adheres to the basic tenets of business and investing: there needs to be a revenue flow, a profit potential, and a strong business plan,” he concludes. If “s-commerce” hasn’t taken off in the last decade as Dobbs foresaw in 2001, it’s because businesses haven’t yet found that essential combination of revenue flow, profit potential, and strong business plans. That doesn’t mean that companies won’t prosper in emerging space markets in the years to come, but it’s worth remembering before being caught up in the hype and hyperbole that often surrounds the industry.

Jeff Foust (jeff@thespacereview.com) is the editor and publisher of The Space Review. He also operates the Spacetoday.net web site and the Space Politics and NewSpace Journal weblogs. Views and opinions expressed in this article are those of the author alone, and do not represent the official positions of any organization or company, including the Futron Corporation, the author’s employer.